Correlation Between Abcam Plc and C4 Therapeutics

Can any of the company-specific risk be diversified away by investing in both Abcam Plc and C4 Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Abcam Plc and C4 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abcam plc and C4 Therapeutics, you can compare the effects of market volatilities on Abcam Plc and C4 Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Abcam Plc with a short position of C4 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abcam Plc and C4 Therapeutics.

Diversification Opportunities for Abcam Plc and C4 Therapeutics

0.0

Correlation Coefficient

Abcam Plc  C4 Therapeutics

Pay attention - limited upside

The 3 months correlation between Abcam and CCCC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Abcam plc and C4 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C4 Therapeutics and Abcam Plc is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Abcam plc are associated (or correlated) with C4 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C4 Therapeutics has no effect on the direction of Abcam Plc i.e., Abcam Plc and C4 Therapeutics go up and down completely randomly.

Pair Corralation between Abcam Plc and C4 Therapeutics

If you would invest  2,225  in Abcam plc on August 18, 2024 and sell it today you would earn a total of  0.00  from holding Abcam plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Abcam plc  vs.  C4 Therapeutics

Abcam plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abcam plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Abcam Plc is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

C4 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C4 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Abcam Plc and C4 Therapeutics

The main advantage of trading using opposite Abcam Plc and C4 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abcam Plc position performs unexpectedly, C4 Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in C4 Therapeutics will offset losses from the drop in C4 Therapeutics' long position.

The idea behind Abcam plc and C4 Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.